THE PERCEIVED EFFECTS OF THE THREE COMPONENTS OF MARKET ORIENTATION ON THE PERFORMANCE OF TOUR FIRMS IN KENYA

Abstract

The principal objective of the study reported in this article was to empirically assess the perceived direct effects of the three components of Market Orientation namely Customer Orientation, Competitor Orientation, and the Inter-functional Coordination on Performance of Tour Firms in Kenya. The relevant primary data were gathered from Chief Executives and Senior Managers of the One hundred and four (104) Tour Firms registered with the Kenya Association of Tour Operators (KATO) using a semistructured questionnaire. The results of the study revealed that the direct effects of the three components and the composite scores of Market Orientation were all statistically significant. First, the beta coefficient for Customer Orientation was 0.607 and this was highly statistically significant (p-value=.000).This variable also explained 36.8% of the variation in firm performance scores. In the case of the Competitor Orientation the beta coefficient was 0.683 which again was highly statistically significant (p-value=.000).The Competitor orientation explained 46.6% of the performance scores. The Inter-functional Coordination Variable hand relatively low beta coefficient of 0.484 which was still statistically significant (p-value=.002). It explained only 23.5% of variation of the performance scores. The composite index scores of the Market Orientation variable explained slightly more than half (52.4%) of the variation of the performance score. In view of the above the study results revealed that customer orientation, competitor orientation and the Inter-functional coordination all had positive effects on performance of tour firms in a developing economy. These results are consistent with those of studies conducted in the developed world. However, since the concept of Market orientation, as a composite measure, explained only slightly more than half ( 52.4%) of the variation of the perceived firm performance scores, future research work should use a broader concept of market orientation and embrace both subjective and objective indicators of firm performance.